OpEd: The Strategic Impact of the Financial Crisis on Space

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  Space News Business

OpEd: The Strategic Impact of the Financial Crisis on Space

By ROBBIN LAIRD

posted: 30 March 2009
04:00 pm ET






The financial crisis and the responses to the crisis will reshape the strategic landscape for years to come. The globalization of the world economy enforces the need for multiple-sum solutions among countries, but each of the major players will position themselves within those solutions and will be either strengthened or weakened for the next phase of global competition.

For the nations, the question becomes what role will space play in the global collaborative or competitive environment? Will space return to its central role as a symbol of national power or play a role in reinforcing multiple sum collaboration? Will zero-sum competition be reinforced or new global sharing arrangements forged? Space is a key part of answering this question.

The twin roles of
China
and
Russia
will be definitional. For the Chinese, with their significant global currency reserves, there will be an opportunity to invest in strategic industries to gain global advantage. Will space emerge as a strategic industry in this regard? The expansion of their launch business – rooted in $58 million launches – could be suggestive of their intent and capabilities. For the Russians, the desire to reassert their role in the near-abroad – meaning former territories of the Soviet Union – and to use what remains of their aerospace, defense and space capabilities to strengthen relations with India and Third World states can allow them to recover lost ground. The hoped for breakthroughs between the
United States
and
India
may not occur because of the return of
Russia
as a significant aerospace and defense actor.

For the
United States
, the role of the state is being reasserted by U.S. President BarackObama’s administration at the expense of the private sector. There is virtually no support in the financial stimulus package for the aerospace and defense sector. The administration could have robustly supported the next generation air traffic control system – there is some support tellingly only in the aviation part of NASA – which, in turn, could shape a new transport landscape in the United States. And this landscape could well help the demographic deconcentration, which, in turn, helps the “green agenda” of the administration. There could have been support for satellite broadband to shape a new distribution of capability in the commercial market, to provide for gaps in homeland security and to support the worldwide activities of either the soft or hard power of the
U.S.
military. And this, in turn, would have helped reduce demographic concentrations and augment sustainable development.

And more generally, the collapse of the credit market calls into question the approach adopted in President Bill Clinton’s administration and continued under President George W. Bush to rely on the private sector to generate significant space capabilities. Will the Commercial Orbital Transportation Services (COTS) program remain even remotely a viable alternative for NASA? Will private launch companies be available to provide capabilities for the Pentagon? Will the commercial sector provide enough American satellite capability to provide reliable bandwidth in a cybersecurity age? And most notably, can the Obama administration shape a new multiple-sum strategy in civil space to save the international space station and guide a new exploration strategy? Without a radical re-look at its relationship with
Europe
, this is not likely. With the challenges from
China
and
Russia
, and the pressures on NASA and military space, it will be increasingly imperative to overcome barriers between the
United States
and
Europe
for collaboration in civil and military space.

Of course, the financial crisis does not only augment the role of the state, it reshapes the private sector as well. The space business is really a residual business for the aerospace and defense sectors. The macro-changes in these businesses play a shaping function for the space business.

And these businesses will be in trouble, as pension funds have to be supported, new programs start to simply be eschewed by Office of Management and Budget, and the inability to put in place new staff to shape a vigorous relook at sustainable space programs. The absence of real commitment to support for manufacturing – civilian or military – in the stimulus package is a core problem as well, for it is through manufacturing that exports are generated. Space businesses can be part of the solution, not simply considered as an overhead cost to be reduced.

Opportunities abound for a strategic relaunch. Combating piracy in
Somalia
with a multinational task force requires shared intelligence, surveillance and reconnaissance (ISR) and communications. Obviously, space assets are crucial. How can we shape a solution and by so doing forge multiple-sum solutions? The multinational engagement in
Afghanistan
requires shared ISR and communications, which again call for multiple-sum sharing of a sort in which the private sector and new systems supporting the “soft” power solutions favored by Obama could be generated. The need to replace the shuttle and to provide cargo transportation to the space station provide clear opportunities to recast the U.S.-European working relationship. Finding a way to use
‘s Automated Transfer Vehicle (ATV) for
U.S.
and allied use is one obvious way; re-engaging the Europeans in exploration or robotic missions is another.

Crises are reshaping moments; they are flashpoints for the remaking of global power landscapes. This one is no different. It is an opportunity to launch new programs and new approaches, not to simply expand state spending for building bridges and tunnels. The famous bridge to nowhere of former Sen. Ted Stevens (R-Alaska) could become a metaphor for the new administration. It need not be so. Engaging the energy of the high-technology industries in a new approach to
Europe
and to multiple-sum programs for space can be part of the change we all want to believe in.

Robbin

Laird is a Washington- and Paris-based defense and aerospace analyst.